Prior Authorization for Rehab: How It Works

Prior authorization is your plan agreeing, in advance, that a level of care is medically necessary for you. For detox and residential rehab it is usual rather than exceptional, the treatment program normally requests it on your behalf, and it is a common reason an admission is delayed.

This page covers who asks and who decides, what medical necessity means at each rung, what concurrent review does while somebody is already in treatment, how to answer a step-down decision, what a peer-to-peer call is, and the deadlines that govern appeals. You can verify your insurance in the same call that produces a clinical assessment, which is the fastest way to find out where you stand. Our wider page on insurance coverage for rehab covers the rest of the benefit.

What prior authorization is, and who requests it

The plan’s advance yes. The program usually asks for it, not you.

An authorization is a decision by your insurer that a specific service, at a specific level of care, is covered for you at this point in time. It is not a payment, and it is not a guarantee of what you will owe. Your deductible and coinsurance still apply on top of it.

In practice the admissions team at a treatment program collects the clinical information and submits the request. That is the right way round, because the request has to speak the plan’s language. You do not have to run this yourself. What helps is having your member ID, the group number and the name on the policy ready at the first call.

Prior authorization is a utilization management tool, and parity law limits how a plan may use it for addiction care. Under the Mental Health Parity and Addiction Equity Act, a plan may not impose a non-quantitative treatment limitation on mental health or substance use benefits unless the “processes, strategies, evidentiary standards, or other factors” behind it are “comparable to, and are applied no more stringently than” the ones used for medical and surgical benefits [1]. Prior authorization is precisely such a limitation. The scope is worth knowing: it applies to non-federal governmental plans with more than 50 employees, to group health plans of private employers with more than 50 employees, and to the individual market [1]. Plans from small employers are not covered directly; they get comparable protection through the Affordable Care Act’s essential health benefits requirement.

Medical necessity criteria for detox and residential care

Two questions, asked in the same order every time.

Is this level of care clinically indicated for this person right now? And would a less intensive level not be enough? A request that answers both explicitly tends to go through. One that only asserts a diagnosis tends not to.

Criteria differ by plan, so nobody can publish the exact list yours uses. The published federal ones show the shape. Medicare’s conditions of payment describe a partial hospitalization patient as somebody needing at least 20 hours a week of therapeutic services who does not require 24-hour care [2], and an intensive outpatient patient as somebody needing at least 9 hours a week [3]. Those are Medicare conditions of payment rather than definitions every payer uses, and a commercial plan may set different counts. They are still a fair guide to how a reviewer thinks about intensity.

For detox and residential admission the clinical spine is withdrawal risk. Federal treatment guidance describes a ladder of settings, from a physician’s office through freestanding facilities and intensive outpatient or partial hospitalization care up to acute inpatient treatment, with placement driven by the clinical picture [4]. Alcohol and sedative withdrawal can be dangerous, and a documented history of severe withdrawal, seizures or delirium is exactly the kind of detail that belongs in the request rather than in somebody’s memory.

If someone is having a seizure, is unresponsive or has trouble breathing, call 911. For a mental health crisis, call or text 988.

Marketplace plans must cover substance use disorder services, and may not apply annual or lifetime dollar limits to them [5]. That sets a floor. It does not decide the rung. Our explainers on medical detox and levels of care describe what each one involves.

Concurrent review while you are in treatment

The plan does not approve a whole stay at the start. It approves a stretch, then asks again.

Concurrent review is the rolling version of the same decision. The program submits updated clinical information before the current authorization runs out, and a reviewer decides whether the person still meets criteria at this rung. Block lengths vary by plan and by contract, so a single universal figure would be invented.

Two things move that decision more than anything else. Attendance and participation, which the person controls. And documentation, which the program controls. If somebody is engaging and the notes show it, continuation is much more likely. Attendance is one of the things a continued stay review turns on, and gaps in it are worth raising with the program before the review rather than after.

You are entitled to know where you stand. Ask the program, at admission, who handles concurrent review, how often it happens and whether they will tell you the outcome each time. A patient who first learns about a review when they are told to pack has been badly served.

What a step-down decision means, and how to answer it

It is usually not a refusal to cover treatment. It is a decision to cover a lighter rung.

When a plan declines to authorize more days at residential level, it is generally saying the criteria for that rung are no longer met and that partial hospitalization or outpatient care would now be appropriate. Sometimes that is clinically right and the step down is the plan the team wanted anyway. Sometimes it is premature.

If your clinical team disagrees, say so straight away rather than after discharge. Three things help. A specific clinical reason the lighter rung is not yet safe, written by the treating clinician. Any change in the last few days that the reviewer may not have seen. And a request for a peer-to-peer call before the decision is finalized.

If the step down goes ahead, get the transition arranged rather than improvised. Moving from residential care to nothing is the failure mode; moving to a structured day program is not.

Peer-to-peer review: what the clinician argues

A doctor-to-doctor conversation about your case, and it is often where a denial turns around.

A peer-to-peer review is a call between the clinician treating you and a clinician working for the plan. It exists because a paper file compresses badly, and a five-minute conversation can convey what a form cannot. Your program requests it; you do not.

What the treating clinician argues is specific rather than general: which criteria are met, with the observations behind them; what has been tried at a lighter level and what happened; what the risk is if intensity drops now; and what the plan for discharge is. The reviewer’s job is to apply the plan’s criteria, so an argument built on those criteria travels further than one built on how well things are going.

Ask your program whether they routinely request peer-to-peer calls after an adverse decision. A yes is a good sign about how they handle the rest of it.

Appeals, expedited appeals and external review

Deadlines are the part people miss, and they are public.

You must file an internal appeal “within 180 days (6 months) of receiving notice that your claim was denied” [6]. Your insurer must complete an internal appeal “within 30 days if your appeal is for a service you haven’t received yet”, and “within 60 days if your appeal is for a service you’ve already received” [6].

Where the situation is urgent, the process compresses and runs in parallel. You may file an internal appeal and an external review request at the same time, and a final decision “must come as quickly as your medical condition requires, and at least within 4 business days after your request is received” [6].

External review is the independent step after an internal appeal fails. You must file a written request for one “within 4 months after the date you receive a notice or final determination from your insurer that your claim has been denied” [7]. Standard external reviews are decided “no later than 45 days after the request was received”, and expedited ones “no later than 72 hours, or less, depending on the medical urgency of the case” [7]. The result is not advisory: your insurer “is required by law to accept the external reviewer’s decision” [7].

Keep copies of everything, with dates and reference numbers. An appeal is largely a documentation exercise, and the person who wrote things down as they happened has a much easier time of it.

Keeping treatment going while an appeal runs

Decide the clinical question first, then the financial one, and get the financial answer in writing.

Care does not automatically stop because an authorization did. What changes is who is expected to pay for the days in dispute. Ask the program directly what happens if you stay: whether those days are billed to you, whether they are held pending the appeal, and what the number would be if the appeal fails. Get that answer in writing before you decide.

Ask the plan the parallel question. Whether an expedited appeal applies, whether anything continues to be covered during the review, and what the state’s own consumer assistance program can do. That program can file an appeal on your behalf [6].

If leaving is unavoidable, leave into something. A transfer to a lighter rung with a date attached is a materially different outcome from a discharge with a leaflet. Our pages on how to get into rehab and keeping your job during rehab cover the practical arrangements, and our directory of our treatment centers and nationwide facility directory show where our programs run. Carrier-specific detail is on our pages for Aetna, Cigna and Humana.

Frequently Asked Questions

Sources

1. Centers for Medicare and Medicaid Services. The Mental Health Parity and Addiction Equity Act (MHPAEA). CMS. https://www.cms.gov/marketplace/private-health-insurance/mental-health-parity-addiction-equity
2. Legal Information Institute. 42 CFR § 410.43 — Partial hospitalization services: Conditions and exclusions. Cornell Law School. https://www.law.cornell.edu/cfr/text/42/410.43
3. Legal Information Institute. 42 CFR § 410.44 — Intensive outpatient services: Conditions and exclusions. Cornell Law School. https://www.law.cornell.edu/cfr/text/42/410.44
4. Center for Substance Abuse Treatment (2006). Detoxification and Substance Abuse Treatment, TIP 45, Chapter 2: Settings, Levels of Care, and Patient Placement. SAMHSA, NCBI Bookshelf. https://www.ncbi.nlm.nih.gov/books/NBK64109/
5. HealthCare.gov. Mental health and substance abuse health coverage options. US Centers for Medicare and Medicaid Services. https://www.healthcare.gov/coverage/mental-health-substance-abuse-coverage/
6. HealthCare.gov. Internal appeals. US Centers for Medicare and Medicaid Services. https://www.healthcare.gov/appeal-insurance-company-decision/internal-appeals/
7. HealthCare.gov. External review. US Centers for Medicare and Medicaid Services. https://www.healthcare.gov/appeal-insurance-company-decision/external-review/

This page is for general information and is not medical advice. Only a licensed clinician who knows your history can tell you what is right for you. If you or someone you know is in immediate danger, call 911. For free, confidential support 24/7, call or text 988.

Author

Kevin Wandler, MD

Chief Medical Officer, The Recovery Village